(a) General rule.--A bylaw of a statutory close corporation adopted by the shareholders may provide that the business and affairs of the corporation shall be managed by or under the direction of the shareholders of the corporation rather than by or under the direction of a board of directors. So long as such a provision continues in effect:
(1) Meetings of shareholders need not be called to elect directors.
(2) Unless the context clearly requires otherwise, the shareholders of the corporation shall be deemed to be directors for purposes of applying provisions of this subpart.
(3) The shareholders of the corporation shall be subject to all liabilities imposed and shall enjoy all rights and immunities conferred by law on directors.
(b) Procedure.--Such a provision may be inserted in the articles or bylaws by amendment if all incorporators or all shareholders, regardless of any limitations stated in the articles or bylaws on the voting rights of any class, authorize the provision. An amendment to the articles or bylaws to delete the provision shall be adopted and shall become effective in accordance with Subchapter B of Chapter 19 (relating to amendment of articles) or section 1504 (relating to adoption, amendment and contents of bylaws) except that the holders of shares of every class shall be entitled to vote on the amendment regardless of any limitations stated in the articles or bylaws on the voting rights of any class.
(c) Notice on shares.--If the articles or bylaws contain a provision authorized by this section, the existence of the provision shall be noted conspicuously on every share certificate issued by the corporation unless the certificate complies with section 2321(c) (relating to notice of statutory close corporation status).
Cross References. Section 2332 is referred to in sections 102, 1504, 2301 of this title.
Structure Pennsylvania Consolidated & Unconsolidated Statutes
Pennsylvania Consolidated & Unconsolidated Statutes
Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
Chapter 23 - Statutory Close Corporations
Section 2301 - Application and effect of chapter
Section 2302 - Definition of minimum vote
Section 2303 - Formation of statutory close corporations
Section 2304 - Additional contents of articles of statutory close corporations
Section 2305 - Election of an existing business corporation to become a statutory close corporation
Section 2306 - Limitations on continuation of statutory close corporation status
Section 2307 - Voluntary termination of statutory close corporation status by amendment of articles
Section 2322 - Share transfer restrictions
Section 2323 - Transfer of shares in breach of transfer restrictions
Section 2324 - Corporation option where a restriction on transfer of a security is held invalid
Section 2325 - Sale option of estate of shareholder
Section 2332 - Management by shareholders
Section 2333 - Appointment of custodian for statutory close corporation
Section 2334 - Appointment of provisional director in certain cases
Section 2335 - Operating corporation as partnership
Section 2336 - Fundamental changes
Section 2337 - Option of shareholder to dissolve corporation